The Beverly Hills City Council has decided to allow a developer to spread payment of $1.3 million in parking fees over three years to enable him to build a shopping plaza on the site of the defunct Brown Derby restaurant.
Mayor Edward I. Brown said the development of the Brown Derby property "will remove a terrible eyesore from the community."
The 4,500-square-foot parcel at Wilshire Boulevard and Rodeo Drive is considered by many as the gateway to the city's fashionable Rodeo Drive shopping district. But the building has been vacant and boarded up for more than two years.
The owner, Roco Property Investment Corp. of Los Angeles, has been unable to finance the project because of the $1.3 million in-lieu parking fee.
As a result, the company is selling the property to Ronald J. Morgan, a Sacramento business man who plans to build a 10,000-square-foot, retail shopping plaza on the site, according to Perry L. Hirsch, an attorney representing Roco Property.
The fee, set two years ago, is the largest ever levied against a developer by the city and the first to be assessed under a restructured parking ordinance that requires developers to pay stiff fees when their projects fail to provide adequate parking. The money is used to finance the construction of public parking structures.
The agreement worked out with the city allows the developer to pay half the fee when the project is completed in September and the remainder in three years. The owner will not be required to pay interest on the money.
Brown said that the city will also look at rewriting a portion of the city's parking ordinance to allow other potential developers to spread out their in-lieu payments.
According to the ordinance, the developer of the Brown Derby property is required to provide 29 parking spaces or pay the city $1.3 million to build the parking elsewhere. The site is small and unable to accommodate underground parking.
The ordinance requires that the money be paid to the city before a building permit is issued. Hirsch said that requirement made financing the project impossible. "It was going to cost us $2 million to build the building and more than $1 million to provide parking," he said.
In the future, developers will be given time to recover the funds from the development before making payments to the city.
"We really appreciate what the council is doing now," Hirsch said. "Before they looked at us and probably said, 'Rich developers, we'll get a few bucks from them.' It doesn't work that way at all and now they know it."